The federal government is expanding the First Home Loan Deposit Scheme to include an additional 10,000 first home buyers – assisting them in getting a loan to purchase a newly-built home, or to build a home, with just a 5 percent deposit. Caps on house prices have also been increased, with buyers in Melbourne now able to access the scheme when purchasing a home worth $850,000, and $950,000 for Syndey-siders.
The scheme has helped 20,000 first home buyers in purchasing a home this year. Treasurer Josh Frydenberg explains,
“Helping another 10,000 first home buyers to buy a new home through our First Home Loan Deposit Scheme will help to support all our tradies right through the supply chain including painters, builders, plumbers and electricians,”
“Combined, the First Home Loan Deposit Scheme, HomeBuilder and First Home Super Saver Scheme represent an unprecedented level of government support for home buyers and the construction industry alike.”
Buyers in Brisbane will now be able to access the scheme for properties worth up to $650,000, and $550,000 in Perth.
“Now is the biggest opportunity for first-time buyers,” said David Milton, managing director of Residential Projects at CBRE.
“The market has been very different due to COVID-19,” said David. “But with the stimulus packages and the focus on employment announced in the Budget, we’re going to get through this and if people are confident with their work, they will buy.”
Forward-thinking developers are also offering buyer incentives, in conjunction with the government grants and assistance, further showcasing how the off-the-plan sector is adapting to the changing conditions.
“Off-the-plan is offering a lot better value for money,” said David. “You can buy a brand new home, for the same prices as nearly-new. You get the latest design trends and the highest quality finishes. You also get a high level of flexibility and choice. If you like a location, you can pick to be north, south, east or west facing and choose between a range of different sized apartments."
Record-low interest rates – which the RBA recently announced would remain at 0.25 percent – and strong levels of federal and state grants aimed at encouraging new home construction, will hopefully push demand for housing credit in states where the virus is seen to come under control and movement and other restrictions are lifted.
The extension comes off the back of the findings from the National Housing Finance and Investment Commission, which predict housing demand could fall by up to 230,000 dwellings over the next three years, due to state border restrictions.